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The Ministry of Planning and Investment has reported that 27,965 businesses have either closed or suspended operations in Vietnam this year. Photo credit: VnExpress

Although Vietnam’s economy was said to be stabilizing, more businesses have closed around the country.

The Ministry of Planning and Investment announced Tuesday that 6,173 businesses had suspended their operations this month.

Over the first five months of the year, 27,965 companies shut down temporarily or permanently, up 20.5 percent year-on-year, news website Thoi Bao Kinh Te Sai Gon (Saigon Times) quoted the ministry as saying at a meeting.

More than 3,900 businesses have finalized procedures for dissolution, a 7.7 percent increase over the same period last year.

“The situation for local businesses is still very difficult; the number of companies that have had to dissolve or suspend operation shows no sigs of abating,” Bui Ha, director of the ministry’s Department of the National Economy.

Nguyen Huyen Diu of the ministry’s Department of Monetary Policies quoted a survey by the State Bank of Vietnam as saying that businesses had major difficulties selling their products, so they didn't take out loans, even though the central bank decreased interest rates in an effort stimulate credit growth.

On the other hand, 31,228 new businesses have been founded since the beginning of this year, up 0.7 percent year one year, the ministry reported, adding that they registered a combined capital of over VND173.6 trillion ($8.29 billion), up 11 percent.

According to the ministry, Vietnam’s foreign direct investment inflows fell during the first five months.

In addition, 500 new FDI projects have been licensed and 167 others have been expanded with the total registered capital of more than $5.5 million, a decrease of 34.3 percent compared to the same period last year.